Selling Your Rental Property the Neighborhood Experts Way
By Michelle Charlton
If you’re thinking about parting ways with your rental property, you’re not alone. Recently, we’ve been fielding more calls from landlords, all who are feeling a bit uneasy about the ever-shifting landscape of landlord-tenant laws.
Here’s the scoop: on November 7, 2023, the city of Tacoma, WA, rolled out the Citizens Initiative Measure No. 1. This new law throws in some fresh rules on evictions, rental fees, giving more notice on rent bumps, and even tossing in some mandatory relocation assistance.
No need to stress, though. We’ve got all the information and resources to help you navigate the laws and make your property shine bright in the process, whether you’re keen on learning more about your rights as a landlord, wanting to trade your rental for a new one, or just ready to bid farewell to the rental property scene. We’re here for you!
First Things First: Capital Gains Taxes and the 1031 Exchange
Navigating the IRS terrain can feel like an abyss, especially with capital gains taxes on rental properties. Our advice? Chat with your tax advisor for a strategy that suits your goals. Some of our clients have turned their rentals into primary residences, and others swear by the art of loss harvesting—balancing capital gains with some well-timed losses. And then there’s the 1031 exchange: a smart move that lets you postpone those taxes by reinvesting your equity into a like-kind investment property. If you’re itching to dive deeper into the world of 1031 exchanges, our investor veteran Falynn Auston wrote a whole blog post on them. Check it out for all the details, plus insider access to her black book of connections she uses for her 1031 deals.
At our office, we’re huge fans of investment properties, which are all about building that generational wealth through savvy property investments (hint: a future blog post in the making). But hey, we get it—life happens, and sometimes selling is just the right move.
A thought from Paige: For those eyeing 1031 exchange properties, consider exploring unincorporated areas with a bit more lenient landlord-tenant vibes. Or, why not broaden your horizons and look out of state for what might be a smoother journey? Just some food for thought!
To Vacate or Not to Vacate, That Is the Question
Selling with a tenant in the mix requires careful planning. We’ve seen renters lose steam when there’s no incentive for them to keep the house spick and span during showings and inspections. It’s even better if you can convince your tenants to make an early exit. An empty nest means you can tackle necessary repairs, update outdated features, and cast a wider net for potential buyers.
A thought from Paige: Frequent showings and the constant flow of contractors can be a bit much for your renters, right? Totally get it. Why not make their life a bit easier during the listing period?
Option 1: Think about offering your tenants who stick around during the listing period some discounted (or hey, even free) rent. Sweet, right?
Option 2: Consider throwing in a weekly cleaning service. It’s a win-win! Keeps the place spotless during all those showings and gives your tenant a breather. Just a little food for thought!
Navigating Existing Leases
Month-to-Month
This is the crème de la crème when it comes to wanting to sell a rental property. You can let the tenant stay in the home during the sale process and leave it up to the next owner to decide if they should keep renting or end the lease.
Fixed Lease
Check out your existing lease and local laws for the nitty-gritty on lease terminations, waiting out the lease term, or having an early move-out chat with your tenants. It’s all part of the game.
Notice Periods
These are usually a chill 20-30 days for month-to-month, and 60-120 days for fixed-term leases. Just a heads up, though—some spots might stretch it to 180 days (yeah, we’re looking at you, city of Tacoma).
A thought from Paige: Landlord Solutions has been our rockstar go-to for anything and everything landlord-tenant related. Seriously, I highly recommend them.
Strategies for Top Dollar
Bid farewell to those “renter vibes” by giving your property a mini makeover. The online appeal of your home is paramount, as 98% of buyers kick off their journey in the digital realm. Wondering about cost-effective updates without a complete overhaul?
We at Neighborhood Experts target updates that shine online, focusing on areas that scream “outdated” for impactful interior fixes: light fixtures, paint, flooring, and hardware. A fresh exterior coat, some landscape TLC, and a layer of fresh bark also set the stage for a stellar first impression. Look for areas of wear and tear and fix them.
For dated light fixtures, look at trendy light fixtures and hardware at Restoration Hardware and similar stores, do a reverse image lookup on Google or Amazon, and then find a budget-friendly alternative on Amazon or Wayfair. Opt for a neutral paint palette for a refreshed look. And flooring does matter—consider budget-friendly luxury vinyl plank (LVP) for a clean, consistent vibe.
Smaller details matter, too: a clean roof and windows, a pressure-washed driveway, a fresh and odor-free atmosphere, and functional light bulbs add significant value (soft white light bulbs show the best on camera). Combine this with savvy staging and effective marketing for a home that’s ready to charm buyers. Boosting your home’s perceived value doesn’t always require a major overhaul—a thoughtful approach can work wonders.
While she helps both buyers and sellers, Michelle Charlton’s sweet spot is helping sellers maximize their home sale profits by giving their homes some strategic TLC before listing them. Having lived in Gig Harbor for more than 16 years, she’s developed relationships with the area’s top home and construction pros, so if you’re looking for a realtor with renovations and new-construction experience, Michelle is the right real estate guide for you. She also leverages the latest marketing strategies, technology, and her detailed knowledge of the local market to help her clients achieve their goals, without the stress.
Having personally bought and sold four homes, Michelle’s love of real estate extends to both her personal and professional life, and can’t think of a more enjoyable and fulfilling way to indulge her love of all things DIY, interior design, and architecture. She can’t imagine living anywhere other than Gig Harbor and is proud to be part of the Neighborhood Experts team.